For discussion PWSC(95-96)90
on 7 February 1996
ITEM FOR PUBLIC WORKS SUBCOMMITTEE
OF FINANCE COMMITTEE
CAPITAL WORKS RESERVE FUND
HEAD 705 - CIVIL ENGINEERING
Block allocations
Members are invited to recommend to the Finance Committee to approve the allocation of $452.70 million for block allocations under Head 705 for 1996-97 together with the creation of a new block allocation Subhead 5100CX, and to delegate to the Financial Secretary the power to authorise expenditure from the new block allocation.
Various block allocations under Head 705 need funding in 1996-97 for existing and new projects to proceed on schedule. The present system of block allocations is administratively cumbersome and leads to underspending.
2. We propose a total allocation of $452.70 million for the block allocations for 1996-97 under Head 705, including the creation of a new block allocation subhead 5100CX, made up as follows -
|
Subhead
|
Description
|
1996-97
proposed allocation
$ million
|
|---|
|
5001BX
|
Landslip preventive measures is for landslip preventive works and related studies (other than those directly related to specific development projects in the Public Works Programme). Because of the exceptional nature of landslip preventive works, which frequently have to be carried out on an urgent or emergency basis to protect lives and property, there is no ceiling on expenditure on individual items under this block allocation. There is, however, a ceiling on total expenditure which can be incurred on works approved under this block allocation which is the maximum sum approved by the Finance Committee for expenditure in the financial year in question.
|
394.00
|
|
5100CX
|
Civil engineering works, studies and investigations for items selected in Category D of the Public Works Programme, which replaces existing block allocation subheads 5001CX to 5003CX and 5011CX, is for minor works, feasibility studies and site investigations in respect of civil engineering works, subject to a maximum ceiling of expenditure of not more than $15 million per Category D item. Items may also be included in Category D to cover the costs of preliminary feasibility studies and investigations to enable civil engineering projects to be included in Category C of the Public Works Programme, and consultants fees and charges for feasibility investigations and design (including preparation of tender documents) of civil engineering projects in Category B or (subject to the Secretary for the Treasurys approval) Category C of the Public Works Programme. Urgent payments in respect of minor outstanding works to a value not exceeding $100,000 on any civil engineering projects that have been substantially completed and for which there is no subhead in the Fund estimates may also be charged to this subhead. Approval will be sought from the Financial Secretary to reinstate such projects in the Fund estimates during the year and, once this approval has been obtained, expenditure will be transferred to the original project.
|
58.7
|
|
Total
|
452.70 |
Enclosure 1 sets out the allocation for each existing block allocation in 1995-96 as compared to the amount proposed under the new block allocation for 1996-97. As with other block allocations under the Capital Works Reserve Fund (CWRF), we also propose that Finance Committee delegate to the Financial Secretary the power to authorise expenditure under the new subhead1 .
3. The Finance Committee approves expenditure under block allocations on the basis of the forecast of total expenditure required for the next financial year, not the total estimated cost of the works to be carried out, the implementation of which can extend beyond the financial year in question. It is necessary for the Finance Committee to approve funds for each of the block allocations under Head 705 for 1996-97 in order to enable the government to undertake various civil engineering works in the next financial year, including meeting payments carried forward from the present and earlier financial years2.
4. The proposed total allocation for the new Head 705 block allocation for 1996-97 is almost double the allocation for the existing subheads in 1995-96 ($452.70m as compared to $221.40m). We have drawn up the allocation proposed for 1996-97 on the basis of expenditure patterns, existing commitments and projects expected to be undertaken in the coming financial year. All of the additional expenditure arises from subhead 5001BX, landslip preventive measures. As set out in the Governor's 1995 Policy Address, in response to Members' concerns, we have undertaken to speed up the landslip preventive measures programme3. Enclosure 2 sets out the key expenditure items under the block allocations in 1996-97.
5. We have also taken the opportunity in this year's block allocation exercise to reduce the number of block allocations under Head 705. The creation of new block allocations has usually taken place on an ad hoc basis in response to a particular need at the time. Underspending is a problem because the procedures governing expenditure under the CWRF prevent us from automatically transferring readily available funds under one block allocation to another block allocation where additional funds are urgently required and then, if necessary, subsequently seeking additional funds from the Finance Committee via PWSC should total expenditure for the financial year in respect of all block allocations look likely to be exceeded. Setting aside expenditure on landslip preventive measures, which because of its nature is less easily forecast, total expenditure on the remaining block allocations under Head 705, since 1992-93, is shown below -
Total expenditure on Head 705 block allocations excluding subhead 5001BX
|
Financial year
|
Original Estimate
$'000
|
Actual Outturn
$'000
|
|---|
|
1992-93
|
20,700
|
9,832
|
|
1993-94
|
25,700
|
13,064
|
|
1994-95
|
43,700
|
22,021
|
|
1995-96
|
65,400
|
# 30,850 |
# Forecast outturn for 1995-96
6. We usually find ourselves only being able to apply to the Finance Committee via the PWSC to increase the permitted level of expenditure under the block allocation requiring the additional funds, leaving the amounts available under other block allocations unchanged. This is particularly true in the early part of the financial year when we are still uncertain of the likely total year expenditure under each block allocation. By combining block allocations covering expenditure on a similar nature of work, we can overcome these problems.
7. In addition, the present variety of financial controls on maximum levels of expenditure on any single item depend on the individual scopes of each block allocation. This is confusing. We propose to introduce only one limit for the new block allocation Subhead 5100CX, that being a maximum expenditure ceiling of not more than $15 million per item4. Above that ceiling we will seek the specific approval of the Finance Committee via the PWSC in the form of a separate project for upgrading to Category A in the Public Works Programme. We will also place all items funded under the new block allocation in Category D of the Public Works Programme so as to be able to impose uniform administrative procedures.
8. The total proposed allocation for the block allocations for 1996-97 under Head 705 is $452.70 million. There are no additional annually recurrent expenditure implications as a result of the proposals.
9. The Capital Works Reserve Fund (CWRF) finances eleven different heads of expenditure covering the Public Works Programme, the acquisition of land, capital subventions and major systems and equipment, and computerisation. The block allocations under Head 705 provide for expenditure on minor civil engineering works and landslip preventive measures, including site investigations and consultancy fees for larger projects in the capital works programme. The ambits of the current block allocations for 1995-96 are set out in Enclosure 3. We allow for a certain level of over-commitment on the sums approved by the Finance Committee in order to cater for expenditure on items which can only start towards the end of the financial year and part of the expenditure must carry forward to the next financial year or for items where we forecast the full amount of expenditure to be spread over several financial years.
1 -- As provided for under the Resolution establishing the CWRF, the Financial Secretary may delegate his power of administration to other officers.
2 -- Even relatively small projects can take more than one year to complete. Most works contracts for example require a one year's maintenance period on completed works. Only after the maintenance period is completed do we release the final amount of money due to the contractor.
3 -- At December 1994 prices, we estimate that we will need to spend about $1.3 billion over the period 1995-96 to 1999-2000. This represents an increase in expenditure of about $800 million over the period.
4 -- We do not allow larger projects, costing more than $15 million each, to be broken down into phases or stages so as to circumvent the need to seek Finance Committee's approval. Finance Committee has previously delegated to the Secretary for the Treasury the power to authorize expenditure on Category D items up to a maximum ceiling of $15 million per item.
Enclosure 1
|
Subhead
|
Title
|
Original
Allocation
1995 - 96
$ million
|
Existing/
Proposed
New
Subhead
| Proposed Title
|
Proposed
Allocation
1996 - 97
$ million
|
|---|
|
5001BX
|
Landslip preventive measures
|
156.00
|
5001BX
|
Landslip preventive measures
|
394.00
|
|
5001CX
|
Minor investigations for civil engineering projects
|
0.50
|
5100CX
|
Civil engineering works, studies and investigations for items selected in
|
58.70
|
|
5002CX
|
Minor outstanding civil engineering items
|
0.20
|
|
Category D of the Public Works Programme
|
|
|
5003CX
|
Minor civil engineering works and studies/investigations selected from items in Category D of the Public Works Progamme
|
58.70
|
|
(this replaces the existing block allocation Subheads 5001CX to 5003CX and 5011CX)
|
|
|
5011CX
|
Project feasibility studies and minor investigations for civil engineering projects
|
6.00
|
|
|
|
|
|
Total
|
221.40
|
|
Total
|
452.70 |
Enclosure 2 to PWSC(95-96)90
|
Project Description
|
Estimate
1996-97
$'000
|
|---|
|
Replacement pier at Sam Ka Tsuen - site investigation
|
250
|
|
Peng Chau typhoon shelter - site investigation
|
600
|
|
Siu Lam typhoon shelter - site investigation
|
700
|
|
Pak Shek Kok reclamation public dump - environmental impact assessment and site investigation
|
2,200
|
|
Relocation of reception facilities to NENT Landfill
|
7,400
|
|
Tai Hom development
|
4,500
|
|
Deep geological structure and seismotectonic study of Hong Kong
|
5,000
|
|
Studies on wave agitation in Victoria Harbour
|
6,500
|
|
Pier for Ma Wan marine traffic control station at Gemini Point, Tsuen Wan
|
8,000
|
|
Ongoing and new LPM contracts for upgrading sub-standard slopes
|
167,000
|
|
Consultancy fees for LPM works including supervision of LPM contracts
|
140,000
|
|
Repairs to unallocated government land after landslides, and non-development clearance
|
11,000 |
Enclosure 3 to PWSC (95-96)90
Block allocation
Subhead
|
Title
|
Ambit
|
|---|
|
5001BX
|
Landslip preventive measures
|
For landslip preventive works and related studies (other than those directly related to specific development projects in the Public Works Programme).
|
|
5001CX
|
Minor investigations for civil engineering projects
|
For site investigation works costing $400,000 or less in respect of each site.
|
|
5002CX
|
Minor outstanding civil engineering projects
|
An arbitrary amount which may be used initially for urgent payments in respect of minor outstanding works to a value not exceeding $100,000 on any civil engineering project which has been substantially completed and for which there is no subhead shown in the Fund estimates. Approval will be sought from the Financial Secretary under delegated power to reinstate such projects in the Fund estimates during the year and, once this approval has been obtained, expenditure will be transferred to the original project.
|
|
5003CX
|
Minor civil engineering works and studies/ investigations selected from items in Category D of the Public Works Programme
|
For minor civil engineering works and studies/investigations selected from Category D of the Public Works Programme, including improvements to existing facilities in Hong Kong, Kowloon and the rural New Territories.
|
|
5011CX
|
Project feasibility studies and minor investigations for civil engineering projects
|
For preliminary feasibility studies and minor investigations to enable civil engineering projects to be included in Category C of the Public Works Programme. |
Last Updated on 8 December 1998
